Singapore remains unmoved at the top of the International Shipping Centre Development (ISCD) Index for the fifth successive year, following a benchmark report published today (10 July 2018) by the Baltic Exchange and Xinhua, China’s news agency.

The index covers 43 of the world’s largest ports and cities and is designed to bring clarity to investors and governments on the relative performance of shipping centres around the world.

The Asia-Pacific region now makes up 50% of the top 10, with three of those centres making up the top four. Singapore maintains its leading position for the fifth consecutive year due to the strategic opportunities brought about by the “Belt and Road” initiative. Hong Kong overtook London – for the first time in five years – to take second place, although London is still assessed to be the top professional maritime services location.

This report underlines the constant competition and innovation taking place in cities around the world to attract maritime related businesses.

Shanghai moved up to fourth place thanks to its rapidly developing modern shipping logistics and shipping services systems, in addition to the coordinated development of its regional shipping counterparts. Tokyo held ninth position, while Busan returned to the top ten, replacing Athens, by virtue of its strategy of vigorously developing its transhipment ports.

The impact of the overall weak economy in the European region meant London’s overall development was behind that of Hong Kong, while Hamburg dropped to seventh. Better news in the European region came from Rotterdam who jumped two places to sixth in the overall rankings due to improved operating efficiency, with new technology applications such as the internet of things, big data, and artificial intelligence, as well as smart port construction.

“This report underlines the constant competition and innovation taking place in cities around the world to attract maritime related businesses. Location is an important ingredient for success in the shipping industry and plays an important part in meeting the latest challenges. The right location gives companies access to clients, the best employees and is a platform for long-term business success.”

Elsewhere, Dubai maintained fifth in the rankings, driven by its innovative free-trade zone and improvement in trade environment, while New York dropped from seventh to eighth.

The report also provides a supplementary ranking, grading cities based solely on the breadth and depth of their maritime services sector, covering shipbroking, engineering, shipping business, legal, shipping finance service and ship repair services.

2018 shows the top ten port cities with the best professional shipping services are, by order of ranking: London, Singapore, Hong Kong, Shanghai, Dubai, Athens, Hamburg, New York-New Jersey, Tokyo, and Houston. Of these, London, Singapore, Hong Kong and Shanghai have been occupying the top four places for four consecutive years. Houston’s shipping services have gained significant momentum in development and attained a top ten place for the first time in five years.

For further details on the ISCD Index, please contact Marcus Lee, the Baltic Exchange at mlee@balticexchange.com.

There’s no denying that global events can have substantial ramifications on maritime shipping. Whether it be financial crises, international relations or the policies of world leaders, history has shown that a non-trade-specific world event or development can have a profound effect on the movement of goods. A recent paper from geopolitical intelligence platform Stratfor, Why Geopolitics Matters to the Global Shipping Industry, has hammered home the importance of world affairs when it comes to the the maritime industry.

“Global shipping is a behemoth of an industry,” Stratfor’s analysts explain. “It has a direct and indirect economic impact of more than $400bn annually, and more than $4tr worth of goods move by sea freight each year. But it’s also a delicate sector, closely tied to the health of major economies, prone to cyclic swings and vulnerable to the world’s reaction or overreaction to any number of political events.”

The paper states that shipping is making progress towards a financial recovery this year but that uncertainty regarding both security and trade relationships will be exacerbated by a number of other limitations. A “downward force” on growth in shipping will come in the form of the remainder of the world’s response to US trade policy, amid continued uncertainty around Iran — aside from the US and China coming to an initial agreement concerning trade. What’s more, slower growth could result from new environmental regulation standards, growing fuel prices and the introduction of bigger vessels.

Geopolitical clout

Stratfor explains that since the beginning of this year, “things have been looking up” for a recovery for the global shipping industry.

The geopolitical uncertainty caused by major events … threatens the industry’s nascent recovery

“With supply and demand in better balance, idle capacity figures … have dropped from the 20162017 winter high of 8.8% to just 1%,” the paper says. “The sector continues to consolidate … and global growth projections are largely positive.”

However, it goes on to say: “As capacity grows in the wake of new, larger ships, the geopolitical uncertainty caused by major events — US-China trade disputes, sanctions related to Washington’s position on Iran and new environmental standards — threatens the industry’s nascent recovery.”

The China-US trade disagreement, possible US sanctions on Iran and new environmental regulations are explored in greater detail in the document.

“Though the US and China have hit the pause button in their ongoing tariff threats over trade, the details of the deal are vague,” it says at the time of publication in May. “With so many potentialities still in play regarding trade, the shipping industry is at risk of having to respond to a number of different outcomes.”

The paper notes that the $50bn of tariffs officially announced by the US and China’s equal retaliatory levies would affect bulk shipping in a regional manner. Even when soy and steel are taken into account, the calculated trade loss would only be a fraction of the world’s dry bulk market, it says, but it also claims that “general uncertainty can magnify perceived reality”. As for potential sanctions on Iran from the US, Stratfor argues that if the latter eventually reinstates sanctions on the former, already-rising oil prices may increase even more. This in turn could push up the prices of bunker fuels that vessels use. The document notes that in Q3 2018, there will be US foreign policy developments on security and trade with both China and Iran and that the overarching geopolitical threat connected to these and other events could quickly turn into “a tipping point for vulnerable sectors, particularly global shipping”.

As for the International Maritime Organisation’s approval of a strategy, in April, to get rid of carbon dioxide emissions completely by 2100, the paper claims: “The new plan, along with plans to reduce sulphur emissions by 2020, will require additional spending from shipping companies. Any new wave of ship orders and deliveries, to compensate for new fuel requirements or in response to positive indicators, could result in the industry facing another oversupply problem.

“Beyond economic drivers, uncertainty derived from US foreign policy towards China, Iran, North Korea or even Europe could serve to push the shipping industry off course, and an inability to react to geopolitical developments with thoughtfulness and versatility may deliver a push the sector wasn’t looking for,” the document concludes.

Current affairs vital

The opinions of the Stratfor paper are similar to some of the sentiments given by BIMCO chief shipping analyst Peter Sand in a presentation concerning the dry bulk shipping market in 2018 and beyond. Mr Sand’s presentation, delivered at TOC Europe in June in the Netherlands’ Rotterdam, claimed that for dry bulk, 2018 is viewed “as the year of opportunity”. According to the presentation, “China is ‘all that matters’ — as the rest of the world either imports a steady amount of dry bulk commodities or slows down its imports”.

As for the global economy, the presentation argued that it is getting nearer to its full potential and that world GDP growth rates are predicted (by the International Monetary Fund) to hit a peak in 2019 and fall towards 2023. However, world trade volume growth (concerning goods imports) is anticipated to increase from 5.5% last year to 5.7% in 2018 and decrease to 5.1% in 2019. The challenge for the shipping industry, the presentation claimed, is “to understand that this is as good as it gets”.

The presentation was given the day after US President Donald Trump met with North Korean leader Kim Jong-un in Singapore. Mr Sand said that the discussions were “certainly affecting the world of shipping, because the world of shipping is enjoying globalisation”. With the US-North Korean relationship a closely-monitored one across the world, it remains to be seen if this will combine with Stratfor’s identified geopolitical factors to impact upon the maritime sphere.

Members will learn with deep regret of the death of Colin Peerless on Tuesday 3 July 2018.

Mr Peerless was first elected a member of the Baltic in 1956. He had represented Lyras Bros Ltd, Nomikos (London) Ltd and Olympic Agencies (UK) Ltd. In 1981 he was elected to the Baltic Board of Directors and served until 1985.

The funeral for Colin Peerless will take place on Thursday 26th July at 1.30pm at Great Waltham Church. The family will then depart to the Crematorium.

All other guests will be welcome to refreshments at the home of Janice Peerless. Would those wishing to attend please contact Janice at janice.peerless@outlook.com so that she will have some idea of numbers.

On Thursday 19 July, the Baltic Exchange Cycling Society will be holding a one-hour training session at the Olympic Park outdoor track (VeloPark). The session will be followed by drinks at a local canal-side bar.

The meet aims to give those participating in RideLondon the chance to come together and get familiar with the start area before the big day. Those taking part will also have the opportunity to formulate plans to ride in groups of two or three, or alternatively, to reconvene at the finish in Green Park.

Furthermore, with Guy Robson stepping down, interim club captain Guy Weston is keen to get as many members together as possible to gather ideas on what the Baltic Cycling Club should entail going forward, in addition to identifying who may want to take over as the new club captain.

Itinerary:

Meet at the Olympic Park (velodrome reception) at 6.30pm, or at the Baltic (by Balls Brothers) at 6.00pm to ride, in convoy, leaving at 6.05pm. (There is a £5 entry fee; lockers are free; water is on tap, and there are changing facilities if you plan to head home on public transport.)

Short intro/briefing followed by a one-hour session on the outdoor circuit, either riding at your own pace or with others – there will be opportunities to ride in close group formation and/or in a chain-gang.

Come and enjoy a weekend of sailing and socialising on the Isle of Wight. The Seaview Sailing Weekend is open to company teams (three or more people) as well as individuals of all abilities teaming-up. Split into six short races aboard Mermaid boats, sailors range from expert to learner, offering competition at all levels.

There will be ample opportunities for comparing notes and socialising from arrival on Friday, 7 September evening through to lunch on Sunday, 9 September including around a three-course dinner at the Yacht Club on Saturday night with late bar, tombola and prize giving. To find out more, email Philip Bacon, AM Nomikos (UK) Ltd.

The annual OSCAR Dragon Boat race takes place on Friday 14 September in Canary Wharf to raise money for Great Ormond Street Hospital through the OSCAR Campaign.

Competing against other companies in two heats of 250m races, the top six teams will battle it out in a final. No rowing experience necessary, there will be a safety briefing and demo before you begin. Each team is comprised of 11 participants: 10 rowers and one drummer. Please do invite spectators along to cheer you on, GOSH will encourage them to make a donation on arrival.

For more information or to register your interest, please email Sian Simpson at sian.simpson@gosh.org or phone her on 020 3841 3135.

Set in the wilds of the Highlands, Sailors’ Society’s Loch Ness Challenge will test your endurance and team working skills to their limit as you canoe just under 60 miles in four days as part of a team of two.

You’ll take in some of the most breathtaking and iconic sights that Scotland has to offer as you paddle along the Great Glen Canoe Trail from Fort William to Inverness, including the length of the infamous Loch Ness.